Yahoo Finance Retail investors account for 52% of NextSource Materials Inc.'s (TSE:NEXT) ownership, while institutions account for 47%
Key Insights
The considerable ownership by retail investors in NextSource Materials indicates that they collectively have a greater say in management and business strategy
The top 9 shareholders own 48% of the company
To get a sense of who is truly in control of NextSource Materials Inc. (TSE:NEXT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutions, on the other hand, account for 47% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of NextSource Materials.
View our latest analysis for NextSource Materials
What Does The Institutional Ownership Tell Us About NextSource Materials?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
NextSource Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of NextSource Materials, (below). Of course, keep in mind that there are other factors to consider, too.
NextSource Materials is not owned by hedge funds. Vision Blue Resources Ltd. is currently the largest shareholder, with 47% of shares outstanding. With 0.7% and 0.3% of the shares outstanding respectively, Brett Whalen and Marc Johnson are the second and third largest shareholders.
On studying our ownership data, we found that 9 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of NextSource Materials
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own some shares in NextSource Materials Inc.. It has a market capitalization of just CA$140m, and insiders have CA$2.5m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 52% stake in NextSource Materials, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand NextSource Materials better, we need to consider many other factors. Take risks for example - NextSource Materials has 6 warning signs (and 3 which are a bit concerning) we think you should know about.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
